NBA Facing a $400 Million Loss this Season | IXGAMES

NBA commissioner David Stern has announced that the league is projecting losses to reach a hefty $400 million this season. In fact the league has been losing hundreds of millions for each year.  Losses are mainly attributed to the current labor contract. The announcement of revenue loss Stern announced during a news conference last Saturday that the figures outlining the NBA’s current economic circumstances were shown to union representatives who have been negotiating for a new collective bargaining agreement. Stern says that the proposed new agreement will double previous losses, reaching at least $200 million a year. The commissioner explains that the current level of revenue channeled to paying players’ salaries is too high. Stern has shown the players’ association the financial reports to explain why the league is gunning for significant changes in the next labor agreement. The current collective bargaining agreement is about to expire in July 2011. This situation has cast a shadow on this weekend’s All-Star festivities as rumors abound that players and the league managements are on different sides of the issue. In fact, labor unrest and even a work stoppage could happen if both sides won’t budge. The league has presented a proposal for a deal that would replace the one that will expire next year. This was however rejected by the players’ union. Billy Hunter, the players’ union director said that the proposal contains changes that are too harsh. In his annual All-Star press conference, the commissioner responded that while the changes may seem harsh, significant action is called for by the current economic situation. Stern says that the union can “denounce it, tear it up, you can burn it, you can jump up and down on it, as long as you understand that it reflects the financial realities of where we are.” He adds that the union can come up with a proposal of their own, and will be considered as long as it deals with the league’s current financial realities. What the Union thinks about the issue On his part, Hunter explains that the union is not out to cause damage to or destroy the NBA brand but just wants a more equitable agreement, one that “doesn’t have a structure that’s oppressive.” Currently, the collective bargaining agreement is supposed to be paying 57 percent of total revenue. However, according to a Sports Illustrated report, some league officials believe that the real figure is higher since 13 franchises surpassed the luxury-tax threshold during this season on the salaries they paid out. Stern intends to change that percentage, hoping that discussions will begin before the expiration of the current agreement. He expressed his determination to change the revenue-sharing model being used in the NBA, which he points out, cannot be changed until negotiations with the union are completed.